The insurance industry is awash these days in acronyms. Adding to the influx of acronyms is the confusion they tend to cause: Many don't describe what they truly represent. The number of definitions for what business process management (BPM), also known as business process optimization (BPO), is-and what it can do-are numerous. Yet, as stated in INN's cover story, its popularity is soaring."Insurance companies are relying on vendors to tell them two things: where to use it, and where not to use it," says Marc Cecere, vice president of the financial services team at Forrester Research Inc., a Cambridge, Mass., research firm.
If you ask Joe Dzigiel, senior manager at Costa Mesa, Calif.-based FileNet Corp., BPM's acronyms and various definitions aren't as critical as what insurance companies are doing-or not doing-to fully use it.
"Insurance companies are missing opportunities to optimize BPM," he says. "Namely, with a lack of skills-based routing to expedite the resolution of more complex cases or cases requiring specialized knowledge."
BPM tends to be fairly simplistic. It automates certain tasks and is generally used for processes that involve sequential steps within functional areas. Yet the insurance industry is built on skilled knowledge workers and decision makers, claims Dzigiel.
"These knowledge workers are not a step you can bypass or replace through automation. They are critical to the process. So, while you can't necessarily automate a difficult decision, you can get all the content and information in front of an expert more expeditiously. It's about having a better process to bring your experts to bear, without actually automating their knowledge, and then getting information to the right group of experts and allowing them to collaborate."
Dzigiel claims that insurance companies are also missing the boat when it comes to making best use of all the operational data that BPM provides. For example, BPM operational data is used in call centers to measure customer waiting time or dropped calls. But it could also be used in claims processing, payments/collections, endorsement processing and more-anywhere an insurance company needs a global picture of its processes in order to make adjustments where bottlenecks occur or opportunities exist.
Analysts say BPM will provide a return on investment. But Dzigiel points to an unremitting roadblock: people trying to make decisions when they don't have all the necessary information. A well-accepted fact: The longer it takes to resolve a claim, the more it costs. Consequently, if the process is optimized, response times can go from weeks to days to hours to minutes, cutting down on the cost of being in decision-limbo.
Maybe we should call BPM something else, such as EDMBPA: expert decision-making via business process automation.
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